Age-specific guide
Allowance for 16-year-olds
Recommended range: $30–$75 per two weeks. Paid biweekly like a real paycheck.
Recommended split
Should be earning most spending money independently. Save 40-50% of job income toward college, first car, or Roth IRA.
The parent lens
Sixteen is prep year for adult money. The goal before they leave home: they should be able to read their own paystub, understand a credit card statement, know what a 401k is, and have opened (or at least understood) a Roth IRA. If any of those are missing, spend the year on them.
Chores a 16-year-old can handle
- •Full W-2 jobs
- •Summer internships
- •Freelance work
Typical savings goals at this age
- •Car
- •College fund
- •Summer abroad / pre-college
- •First apartment deposit (years out)
Money topics to teach now
- •College cost ROI
- •FAFSA basics
- •First credit card (authorized user → own)
- •Rent vs own math
Common mistakes
- ×Sending them to college without ever discussing loan math
- ×Cosigning credit cards without a spending discipline in place first
FAQs
Should a 16-year-old still get allowance?
If they have a real job, probably not. If they're focused on school/sports/service instead of working, a small stipend is fine. Never both at full rates.
When should I open a Roth IRA for my 16-year-old?
Immediately, if they have earned income. A parent-match (you match their contribution 1:1) is a common wealth-building move.